The development of the Czech National Bank's foreign exchange reserves between 1993 and 2023: An overview of the relative level of reserves in international comparison and an assessment of their optimality

This bachelor thesis focuses on the development of the Czech National Bank’s foreign exchange reserves during the period 1993–2023, with emphasis on their role in monetary policy and their relative level in international comparison. The theoretical part summarizes the importance of foreign exchange reserves in terms of macroeconomic stability, exchange rate policy, and responses to external shocks. The analytical section assesses the adequacy of reserve levels using two key indicators – the ratio of reserves to GDP and the number of months of import coverage. The analysis shows that the Czech Republic has maintained an above-average level of reserves throughout the observed period, particularly after 2013 in connection with the exchange rate commitment policy. Compared to Poland, Hungary, and Sweden, the CNB adopts a markedly conservative approach, which ensures a high degree of resilience but also generates fiscal costs. The final part of the thesis therefore offers recommendations on how to manage reserves more efficiently – mainly through optimizing their structure, reassessing the target level, and increasing returns while maintaining safety.